Glossary · Compliance and regulation
An investment adviser's fiduciary duty under the Advisers Act comprises a duty of care and a duty of loyalty, together requiring a reasonable belief that advice is in the client's best interest.
The SEC set out its interpretation of the standard in 2019. Two points are commonly missed: cost is a factor an adviser must consider rather than assume, and the duty cannot be disclosed away by a blanket waiver.
It applies to the whole relationship, not to individual transactions — which is why documentation of the basis for advice matters as much as the advice.